Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Nauman v. Nauman

Court of Appeals of Arkansas, Division IV

February 14, 2018

MICHAEL NAUMAN APPELLANT
v.
RENE NAUMAN APPELLEE

         APPEAL FROM THE PULASKI COUNTY CIRCUIT COURT, THIRTEENTH DIVISION [NO. 60DR-15-879] HONORABLE ELLEN BRANTLEY, SPECIAL JUDGE

          Gill Ragon Owen, P.A., by: Sharon Elizabeth Echols and Christopher L. Travis, for appellant.

          Dodds, Kidd, Ryan & Rowan, by: Judson C. Kidd and Catherine A. Ryan, for appellee.

          BART F. VIRDEN, Judge

         Michael Nauman appeals the Pulaski County Circuit Court order awarding Rene Nauman alimony. Michael also challenges the circuit court's findings that certain stock options are vested marital property and that future interests from these stock options are divisible. We affirm.

         I. Factual History

         Michael and Rene Nauman divorced in November 2016 after nineteen years of marriage. The parties have two children ages fourteen and seventeen. The parties agreed to split much of the marital estate roughly in half, with each party receiving around $6.5 million in liquid assets and personal property. The circuit court held a bench trial on the remaining issues of alimony, child custody and support, and whether the Brady Corporation stock options constitute marital property.

         For approximately the first sixteen years of the marriage, Michael was an executive vice president at Molex, Incorporated (Molex). When Michael left Molex in 2014, he was paid $12 million pursuant to a noncompete agreement, and this money was placed in government savings accounts and stocks and bonds. Also in 2014, Michael became the president and CEO of Brady Corporation (Brady), a publicly-traded company located in Milwaukee, Wisconsin, from which he receives a yearly salary of around $718, 000. When Michael joined Brady he was granted restricted stock-unit options and nonqualified-stock options as part of an incentive-and-reward plan. The terms of the stock options are found in the "Brady Corporation Restricted Stock Unit Agreement, " the "Brady Corporation Nonqualified Stock Option, " and the "2012 Omnibus Incentive Plan."

         At the trial, Rene testified that she was two college-credit hours short of a bachelor's degree in marketing and that for the first two years of the marriage she worked for Baptist Health in the marketing department. After that, Rene quit her job to take care of their children full time. She explained that throughout the marriage, Michael traveled extensively for his job, only coming home on some weekends. Rene testified about her estimated monthly expenses including home maintenance, utilities and water, phone, the children's school expenses, medication and supplements, life insurance, health insurance, auto and home insurance, property tax, a mortgage, haircuts, pet care, gifts, yard work, transportation, the children's sports activities, dining out, the children's yearly camps, travel and entertainment, and vacation. Rene presented two affidavits regarding monthly expenses. The first estimate shows monthly household expenses of $12, 995, and the second estimate shows expenses of $19, 946.25. Rene testified that in estimating some expenses she used her best guess, and for others she had a verified amount. She explained that the second estimate is higher because she did more research, and the second affidavit includes a mortgage estimate.

         Cheryl Shuffield, a certified public accountant and expert specializing in financial forensic designation relating to legal procedures and evidence, testified at the trial. Shuffield testified that she estimated Michael's income several different ways, and based on her assessment, his child-support obligation according to the chart ranges from $8, 871 to $15, 060 a month.

         Shuffield offered testimony regarding the Brady restricted stock units granted to Michael, and she explained that "Mr. Nauman simply has to continue employment for the stocks to vest. He also becomes fully vested if he dies or is disabled. Under section 2(b) of the Restricted Stock Unit Agreement, if he terminates his employment, then he loses any unvested RSUs." Shuffield also testified that if there is a change of control of the company or if there is a merger or dissolution, the stocks become fully vested. Shuffield stated that if Michael is terminated for cause, he would be unable to exercise his rights. Shuffield declined to estimate the fair market value of the stocks because "their value will depend upon the market price at the date of actual-of vesting and then will vary thereafter until exercised." As for the nonqualified stock option, Shuffield testified that the vesting schedule is the same as the exercise period-a third after the first year, another third after the second year, and the final third after three years or more.

         Shuffield explained that if Rene does not liquidate any of her assets, the dividends from investments provide around $85, 000 in yearly income. Shuffield testified that, according to her pretax analysis, if Rene chooses to spend the principal and the interest of the assets she receives in the divorce, not including retirement accounts or child-support payments, she will have a yearly income of $130, 000. Shuffield estimated that if the spendable amount of child support is added to this amount, Rene's yearly income would be around $190, 000.

         The circuit court entered the divorce decree on November 23, 2016. Michael was awarded the family home, and he was ordered to pay Rene $75, 000 for her share of the reduction of the debt. Rene was ordered to quitclaim her interest in the house to Michael. The court found that Rene owns and is financially responsible for the Foxcroft condominium valued at $145, 000. Rene kept her Cadillac Escalade, and Michael kept his Jaguar and a Buick sedan. The court equally divided multiple investment accounts, the "WWMDTA" family trust, three separate 401k accounts, the Roth IRA, the retirement plan, and all cash.

         The circuit court made the following findings regarding "the status and divisibility of stock options." Michael was granted rights to acquire certain shares of stock in Brady, though the right to acquire those shares is not yet exercisable. Some of the rights are outright grants of stock and others are stock options. Michael acquired the rights during the marriage, and those rights are exercisable in 2016, 2017, 2018, and 2019. Under the terms of the stock award, Michael will receive the stock if he still works for Brady at the time the options become available. The stock options are vested once the rights to them cannot be unilaterally terminated by the employer without terminating the employee; thus, Michael's rights to the stock award are vested and may be divided as marital property. Only the portion of the awards intended to compensate for Michael's past performance (and not incentive for future work) are considered marital property, and the stock awards are divided as follows: eighty percent of the award exercisable in 2016; forty percent of the award exercisable in 2017; and none of the awards exercisable in 2018 and 2019. Michael retains all interest in the Brady stock options that vested as of May 11, 2016, and he is ordered to pay Rene $46, 164.75 for her property interest in it. Michael also retains the shares of Brady stock held in the Morgan Stanley account, and he must pay Rene $92, 936 for her interest in the stocks.

         The circuit court found that Michael's monthly net income is $43, 562 and set child support according to the chart at $9100 per month to continue until both children reach age eighteen. The circuit court clarified that no child support shall be payable on Michael's stock grants that are divided with Rene, but Michael shall pay fifteen percent of the value of the stock grants that are not divided (the post-2017 stock grants) into a trust for the children.

         Each party received two Utah Educational Savings Plans, and they were ordered to equally divide the savings bonds.

         The circuit court also awarded $2500 a month in alimony to Rene. The circuit court concluded that despite the large amount of money involved in this divorce, $2500 in alimony is "not a lot" and is appropriate here. The court acknowledged that, though Rene has a means of income through investments, child-support payments will continue only four more years and that "with two school-aged children, with which the Plaintiff is heavily involved and the Defendant who is only able to be here some, only working part-time right now is feasible for the plaintiff. . . . [s]uch work could be increased as the children leave home. Therefore, the Defendant shall pay spousal support of . . . $2500 per month." The circuit court also noted that the matter of alimony is subject to review in four years but that "the Court is just not going to try and predict that far out."

         Michael filed a motion to reconsider on December 7, 2016. In it he argued that the circuit court failed to consider or make findings regarding Rene's financial need and that the circuit court impermissibly automatically escalated alimony at the end of four years. Michael also appealed the circuit court's division of the rights to the stock awards as marital property. He argued that Brady has the right to unilaterally deny Michael these benefits; thus, he does not have enforceable contract rights to the stock awards.

         The court did not rule on the motion to reconsider, and it was deemed denied. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.